Williams (NYSE: WMB) today announced its unaudited financial
results for the three months ended March 31, 2022.
Growth continues across key financial metrics
- GAAP net income of $379 million, or $0.31 per diluted
share
- Adjusted net income of $499 million, or $0.41 per diluted share
(Adjusted EPS) – up 16% and 17%, respectively, vs. 1Q 2021
- Adjusted EBITDA of $1.511 billion – up $96 million or 7% vs. 1Q
2021
- Cash flow from operations (CFFO) of $1.082 billion – up $167
million or 18% vs. 1Q 2021
- Available funds from operations (AFFO) of $1.190 billion – up
$161 million or 16% vs. 1Q 2021
- Dividend coverage ratio of 2.30x (AFFO basis)
- Achieved record contracted transmission capacity of 24.4 Bcf/d
– up 3% from 1Q 2021
- Expect 7% Adjusted EBITDA growth in 2022 with guidance midpoint
of $6.05 billion, yielding 6% CAGR over the last five years
Recently executed strategic agreements position company for
continued growth
- Secured customer commitments for the Texas to Louisiana Energy
Pathway Project, a 364 MMcf/d Transco expansion project to serve
the growing LNG export market
- Secured transportation and processing agreement with Salamanca
producers in Deepwater Gulf of Mexico, marking the 7th tieback to
Williams’ deepwater assets over the past two years
- Reached agreement on two new gathering expansions for the rich
Utica and Marcellus regions
- Acquired Trace Midstream Haynesville gathering assets and
associated customer commitment to advance wellhead to water
strategy
- Announced partnerships with decarbonization technology provider
Context Labs, Cheniere and other key stakeholders to facilitate
delivery of next generation natural gas through GHG quantification,
monitoring, reporting and verification technology
CEO Perspective
Alan Armstrong, president and chief executive officer, made the
following comments:
“Our natural gas focused strategy continues to deliver as
evidenced in our strong first quarter results. Even without the
extreme winter weather we saw in first quarter last year, Adjusted
EBITDA is up 7 percent with growth across all four of our core
business segments as well as at our upstream JV operations. This
growth in our base business, better than planned market
fundamentals and the Trace acquisition are driving a $250 million
increase in the midpoint of our 2022 Adjusted EBITDA guidance.
“This past quarter we achieved a 3% increase in transmission
contracted capacity compared to the same period last year led by
bringing on line the Leidy South Transco expansion project
throughout 2021. We are experiencing continued demand for capacity
on our Transco pipeline network as evidenced by the recently
contracted Texas to Louisiana Energy Pathway project now in
execution to serve the Gulf Coast LNG export market by fourth
quarter 2025. We now have six unique transmission expansion
projects in execution totaling 1.9 Bcf/d to serve growing natural
gas demand. In addition, we recently closed on the strategic
acquisition of assets from Trace Midstream. The transaction
includes a long-term capacity commitment from a Trace customer in
support of Williams’ Louisiana Energy Gateway project that will
move Haynesville gas to premium Transco markets, as well as to
growing industrial and LNG export demand along the Gulf Coast.
“As we look overseas to the energy crisis in Europe, we
recognize the need for reliable, affordable and clean energy that
can keep up with the growth that the world demands on a global
scale. Williams has critical infrastructure connected to the best
natural gas basins in the United States to serve these growing
needs. Our organization is excited about stepping up to meet these
challenges, and we will deliver on these opportunities."
Williams Summary Financial
Information
1Q
Amounts in millions, except ratios and
per-share amounts. Per share amounts are reported on a diluted
basis. Net income amounts are from continuing operations
attributable to The Williams Companies, Inc. available to common
stockholders.
2022
2021
GAAP Measures
Net Income
$
379
$
425
Net Income Per Share
$
0.31
$
0.35
Cash Flow From Operations
$
1,082
$
915
Non-GAAP Measures (1)
Adjusted EBITDA
$
1,511
$
1,415
Adjusted Net Income
$
499
$
429
Adjusted Earnings Per Share
$
0.41
$
0.35
Available Funds from Operations
$
1,190
$
1,029
Dividend Coverage Ratio
2.30x
2.07x
Other
Debt-to-Adjusted EBITDA at Quarter End
(2)
3.81x
4.20x
Capital Investments (3)
$
316
$
277
(1) Schedules reconciling Adjusted Net
Income, Adjusted EBITDA, Available Funds from Operations and
Dividend Coverage Ratio (non-GAAP measures) to the most comparable
GAAP measure are available at www.williams.com and as an attachment
to this news release.
(2) Does not represent leverage ratios
measured for WMB credit agreement compliance or leverage ratios as
calculated by the major credit ratings agencies. Debt is net of
cash on hand, and Adjusted EBITDA reflects the sum of the last four
quarters.
(3) Capital Investments includes increases
to property, plant, and equipment (growth & maintenance
capital), purchases of businesses, net of cash acquired, purchases
of and contributions to equity-method investments and purchases of
other long-term investments.
GAAP Measures
- First-quarter 2022 net income decreased by $46 million compared
to the prior year reflecting the benefit of higher service revenues
from commodity-based gathering and processing rates in the West and
Transco’s Leidy South project being in service, higher commodity
margins, and higher results from our upstream operations associated
with increased scale of operations, more than offset by a $123
million net unrealized loss on commodity derivatives, the absence
of a $77 million favorable impact in 2021 from Winter Storm Uri,
increased depreciation and amortization, and increased operating
and administrative expenses driven by the Sequent acquisition and
increased scale of our upstream operations.
- Cash flow from operations for the first quarter of 2022
increased as compared to 2021 primarily due to higher operating
results exclusive of non-cash items, lower margin deposits
associated with commodity derivatives, and higher distributions
from equity-method investments.
Non-GAAP Measures
- First-quarter 2022 Adjusted EBITDA increased by $96 million
over the prior year, driven by the previously described benefits
from service revenues, commodity margins, and upstream operations,
partially offset by planned higher operating and administrative
costs associated with the Sequent and upstream JV ownership
additions.
- First-quarter 2022 Adjusted Income improved by $70 million over
the prior year, driven by the previously described impacts to net
income, adjusted primarily to remove the effects of net unrealized
losses on commodity derivatives and amortization of certain assets
from the Sequent acquisition.
- First-quarter 2022 Available Funds From Operations increased by
$161 million compared to the prior year primarily due to higher
operating results exclusive of non-cash items and higher
distributions from equity-method investments.
Business Segment Results & Form 10-Q
Williams' operations are comprised of the following reportable
segments: Transmission & Gulf of Mexico, Northeast G&P,
West, Gas & NGL Marketing Services and Other. For more
information, see the company's first-quarter 2022 Form 10-Q.
First Quarter
Amounts in millions
Modified EBITDA
Adjusted EBITDA
1Q 2022
1Q 2021
Change
1Q 2022
1Q 2021
Change
Transmission & Gulf of Mexico
$
697
$
660
$
37
$
697
$
660
$
37
Northeast G&P
418
402
16
418
402
16
West
260
222
38
260
222
38
Gas & NGL Marketing Services
13
93
(80
)
65
93
(28
)
Other
5
33
(28
)
71
38
33
Total
$
1,393
$
1,410
($
17
)
$
1,511
$
1,415
$
96
Note: Williams uses Modified EBITDA for
its segment reporting. Definitions of Modified EBITDA and Adjusted
EBITDA and schedules reconciling to net income are included in this
news release.
Transmission & Gulf of Mexico
- First-quarter 2022 Modified and Adjusted EBITDA improved
compared to the prior year driven by higher service revenues from
Transco’s recently in-service Leidy South expansion project.
Northeast G&P
- First-quarter 2022 Modified and Adjusted EBITDA increased over
the prior year driven by higher service revenues, primarily related
to gathering rate escalations in various systems in the
Northeast.
West
- First-quarter 2022 Modified and Adjusted EBITDA increased
compared to the prior year benefiting from higher commodity-based
gathering and processing rates and higher Haynesville gathering
volumes, as well as favorable commodity margins.
Gas & NGL Marketing Services
- First-quarter 2022 Modified EBITDA declined from the prior year
primarily reflecting a $57 million net unrealized loss on commodity
derivatives, which is excluded from Adjusted EBITDA. Both measures
were also impacted by the absence of a $58 million favorable impact
in 2021 from Winter Storm Uri, which was offset by higher commodity
margins and higher administrative costs associated with the Sequent
business acquired in July 2021.
Other
- First-quarter 2022 Modified EBITDA declined compared to the
prior year primarily reflecting a $66 million net unrealized loss
on commodity derivatives related to our upstream operations, which
is excluded from Adjusted EBITDA. Both measures were also impacted
by the absence of a $22 million favorable impact in 2021 from
Winter Storm Uri, which was more than offset by higher results from
upstream operations.
2022 Financial Guidance
The company now expects 2022 Adjusted EBITDA between $5.9
billion and $6.2 billion, a $250 million midpoint increase from
guidance originally issued February 2022. The company now expects
2022 growth capital expenditures between $2.25 billion to $2.35
billion, a $1 billion midpoint increase from guidance originally
issued February 2022 driven by the strategic acquisition of Trace
Midstream assets. The company continues to expect maintenance
capital expenditures between $650 million and $750 million, which
includes capital for emissions reduction and modernization
initiatives. Importantly, Williams anticipates achieving a leverage
ratio midpoint of 3.8x, which along with expectations to generate
positive free cash flow after dividends and capital expenditures
(excluding Trace acquisition of approximately $950 million) will
allow it to retain financial flexibility. Dividend guidance
increased 3.7% on an annualized basis to $1.70 in 2022 from $1.64
in 2021.
Williams' First-Quarter 2022 Materials to be Posted Shortly;
Q&A Webcast Scheduled for Tomorrow
Williams first-quarter 2022 earnings presentation will be posted
at www.williams.com. The company’s first-quarter 2022 earnings
conference call and webcast with analysts and investors is
scheduled for Tuesday, May 3, at 9:30 a.m. Eastern Time (8:30 a.m.
Central Time). Participants who wish to join the call by phone must
register using the following link:
http://www.directeventreg.com/registration/event/9957109
A webcast link to the conference call is available on Williams'
Investor Relations website. A replay of the webcast will be
available on the website for at least 90 days following the
event.
About Williams
Williams (NYSE: WMB) is committed to being the leader in
providing infrastructure that safely delivers natural gas products
to reliably fuel the clean energy economy. Headquartered in Tulsa,
Oklahoma, Williams is an industry-leading, investment grade C-Corp
with operations across the natural gas value chain including
gathering, processing, interstate transportation and storage of
natural gas and natural gas liquids. With major positions in top
U.S. supply basins, Williams connects the best supplies with the
growing demand for clean energy. Williams owns and operates more
than 30,000 miles of pipelines system wide – including Transco, the
nation’s largest volume and fastest growing pipeline – and handles
approximately 30 percent of the natural gas in the United States
that is used every day for clean-power generation, heating and
industrial use. www.williams.com
The Williams Companies,
Inc.
Consolidated Statement of
Income
(Unaudited)
Three Months Ended March
31,
2022
2021
(Millions, except per-share
amounts)
Revenues:
Service revenues
$
1,537
$
1,452
Service revenues – commodity
consideration
77
49
Product sales
1,104
1,147
Net gain (loss) on commodity
derivatives
(194
)
(36
)
Total revenues
2,524
2,612
Costs and expenses:
Product costs
803
932
Processing commodity expenses
30
21
Operating and maintenance expenses
394
360
Depreciation and amortization expenses
498
438
Selling, general, and administrative
expenses
154
123
Other (income) expense – net
(9
)
(1
)
Total costs and expenses
1,870
1,873
Operating income (loss)
654
739
Equity earnings (losses)
136
131
Other investing income (loss) – net
1
2
Interest incurred
(289
)
(296
)
Interest capitalized
3
2
Other income (expense) – net
5
(2
)
Income (loss) before income taxes
510
576
Less: Provision (benefit) for income
taxes
118
141
Net income (loss)
392
435
Less: Net income (loss) attributable to
noncontrolling interests
12
9
Net income (loss) attributable to The
Williams Companies, Inc.
380
426
Less: Preferred stock dividends
1
1
Net income (loss) available to common
stockholders
$
379
$
425
Basic earnings (loss) per common
share:
Net income (loss)
$
.31
$
.35
Weighted-average shares (thousands)
1,216,940
1,214,646
Diluted earnings (loss) per common
share:
Net income (loss)
$
.31
$
.35
Weighted-average shares (thousands)
1,221,279
1,217,211
The Williams Companies,
Inc.
Consolidated Balance
Sheet
(Unaudited)
March 31, 2022
December 31,
2021
(Millions, except per-share
amounts)
ASSETS
Current assets:
Cash and cash equivalents
$
604
$
1,680
Trade accounts and other receivables
1,987
1,986
Allowance for doubtful accounts
(14
)
(8
)
Trade accounts and other receivables –
net
1,973
1,978
Inventories
201
379
Derivative assets
104
301
Other current assets and deferred
charges
272
211
Total current assets
3,154
4,549
Investments
5,107
5,127
Property, plant, and equipment
44,416
44,184
Accumulated depreciation and
amortization
(15,230
)
(14,926
)
Property, plant, and equipment – net
29,186
29,258
Intangible assets – net of accumulated
amortization
7,278
7,402
Regulatory assets, deferred charges, and
other
1,324
1,276
Total assets
$
46,049
$
47,612
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
1,584
$
1,746
Accrued liabilities
1,099
1,201
Long-term debt due within one year
1,625
2,025
Total current liabilities
4,308
4,972
Long-term debt
20,801
21,650
Deferred income tax liabilities
2,570
2,453
Regulatory liabilities, deferred income,
and other
4,399
4,436
Contingent liabilities and commitments
Equity:
Stockholders’ equity:
Preferred stock
35
35
Common stock ($1 par value; 1,470 million
shares authorized at March 31, 2022 and December 31, 2021; 1,252
million shares issued at March 31, 2022 and 1,250 million shares
issued at December 31, 2021)
1,252
1,250
Capital in excess of par value
24,476
24,449
Retained deficit
(13,378
)
(13,237
)
Accumulated other comprehensive income
(loss)
(28
)
(33
)
Treasury stock, at cost (35 million shares
of common stock)
(1,041
)
(1,041
)
Total stockholders’ equity
11,316
11,423
Noncontrolling interests in consolidated
subsidiaries
2,655
2,678
Total equity
13,971
14,101
Total liabilities and equity
$
46,049
$
47,612
The Williams Companies,
Inc.
Consolidated Statement of Cash
Flows
(Unaudited)
Three Months Ended March
31,
2022
2021
(Millions)
OPERATING ACTIVITIES:
Net income (loss)
$
392
$
435
Adjustments to reconcile to net cash
provided (used) by operating activities:
Depreciation and amortization
498
438
Provision (benefit) for deferred income
taxes
115
144
Equity (earnings) losses
(136
)
(131
)
Distributions from unconsolidated
affiliates
212
176
Net unrealized (gain) loss from derivative
instruments
123
—
Amortization of stock-based awards
21
20
Cash provided (used) by changes in current
assets and liabilities:
Accounts receivable
(3
)
(59
)
Inventories
178
(8
)
Other current assets and deferred
charges
(65
)
(6
)
Accounts payable
(138
)
38
Accrued liabilities
(149
)
(116
)
Changes in current and noncurrent
derivative assets and liabilities
101
(6
)
Other, including changes in noncurrent
assets and liabilities
(67
)
(10
)
Net cash provided (used) by operating
activities
1,082
915
FINANCING ACTIVITIES:
Proceeds from long-term debt
3
897
Payments of long-term debt
(1,256
)
(5
)
Proceeds from issuance of common stock
37
3
Common dividends paid
(518
)
(498
)
Dividends and distributions paid to
noncontrolling interests
(37
)
(54
)
Contributions from noncontrolling
interests
3
2
Payments for debt issuance costs
—
(6
)
Other – net
(30
)
(13
)
Net cash provided (used) by financing
activities
(1,798
)
326
INVESTING ACTIVITIES:
Property, plant, and equipment:
Capital expenditures (1)
(291
)
(260
)
Dispositions – net
(6
)
(1
)
Contributions in aid of construction
(3
)
19
Purchases of and contributions to
equity-method investments
(56
)
(14
)
Other – net
(4
)
(1
)
Net cash provided (used) by investing
activities
(360
)
(257
)
Increase (decrease) in cash and cash
equivalents
(1,076
)
984
Cash and cash equivalents at beginning of
year
1,680
142
Cash and cash equivalents at end of
period
$
604
$
1,126
_____________
(1) Increases to property, plant, and
equipment
$
(260
)
$
(263
)
Changes in related accounts payable and
accrued liabilities
(31
)
3
Capital expenditures
$
(291
)
$
(260
)
Transmission & Gulf of
Mexico
(UNAUDITED)
2021
2022
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
Regulated interstate natural gas
transportation, storage, and other revenues (1)
$
708
$
693
$
706
$
739
$
2,846
$
730
Gathering, processing, and transportation
revenues
86
90
74
94
344
82
Other fee revenues (1)
4
4
5
5
18
5
Commodity margins
8
7
8
12
35
15
Operating and administrative costs (1)
(198
)
(197
)
(215
)
(226
)
(836
)
(202
)
Other segment income (expenses) - net
(1)
5
5
7
16
33
19
Impairment of certain assets
—
(2
)
—
—
(2
)
—
Proportional Modified EBITDA of
equity-method investments
47
46
45
45
183
48
Modified EBITDA
660
646
630
685
2,621
697
Adjustments
—
2
—
—
2
—
Adjusted EBITDA
$
660
$
648
$
630
$
685
$
2,623
$
697
Statistics for Operated Assets
Natural Gas Transmission
Transcontinental Gas Pipe Line
Avg. daily transportation volumes
(Tbtu)
14.1
13.1
13.8
14.2
13.8
15.0
Avg. daily firm reserved capacity
(Tbtu)
18.6
18.3
18.7
19.2
18.7
19.3
Northwest Pipeline LLC
Avg. daily transportation volumes
(Tbtu)
2.8
2.2
2.0
2.6
2.4
2.8
Avg. daily firm reserved capacity
(Tbtu)
3.8
3.8
3.8
3.8
3.8
3.8
Gulfstream - Non-consolidated
Avg. daily transportation volumes
(Tbtu)
1.0
1.2
1.3
1.1
1.2
0.9
Avg. daily firm reserved capacity
(Tbtu)
1.3
1.3
1.3
1.3
1.3
1.3
Gathering, Processing, and Crude Oil
Transportation
Consolidated (2)
Gathering volumes (Bcf/d)
0.28
0.31
0.25
0.29
0.28
0.30
Plant inlet natural gas volumes
(Bcf/d)
0.46
0.41
0.44
0.48
0.45
0.48
NGL production (Mbbls/d)
29
26
28
33
29
31
NGL equity sales (Mbbls/d)
7
5
6
7
6
7
Crude oil transportation volumes
(Mbbls/d)
130
151
120
135
134
110
Non-consolidated (3)
Gathering volumes (Bcf/d)
0.36
0.40
0.29
0.36
0.35
0.39
Plant inlet natural gas volumes
(Bcf/d)
0.37
0.40
0.29
0.36
0.35
0.38
NGL production (Mbbls/d)
28
31
21
27
27
28
NGL equity sales (Mbbls/d)
9
11
6
7
8
8
(1) Excludes certain amounts associated
with revenues and operating costs for tracked or reimbursable
charges. Also, Operating and administrative costs increased in
2021, particularly in third quarter and fourth quarter, due to
higher incentive and equity compensation expense.
(2) Excludes volumes associated with
equity-method investments that are not consolidated in our
results.
(3) Includes 100% of the volumes
associated with operated equity-method investments.
Northeast G&P
(UNAUDITED)
2021
2022
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
Gathering, processing, transportation, and
fractionation revenues
$
311
$
315
$
340
$
342
$
1,308
$
323
Other fee revenues (1)
25
25
26
27
103
27
Commodity margins
3
—
(2
)
4
5
6
Operating and administrative costs (1)
(89
)
(86
)
(94
)
(103
)
(372
)
(85
)
Other segment income (expenses) - net
(1
)
(7
)
(3
)
(3
)
(14
)
(3
)
Proportional Modified EBITDA of
equity-method investments
153
162
175
192
682
150
Modified EBITDA
402
409
442
459
1,712
418
Adjustments
—
—
—
—
—
—
Adjusted EBITDA
$
402
$
409
$
442
$
459
$
1,712
$
418
Statistics for Operated Assets and Blue
Racer Midstream
Gathering and Processing
Consolidated (2)
Gathering volumes (Bcf/d)
4.19
4.10
4.26
4.38
4.24
4.03
Plant inlet natural gas volumes
(Bcf/d)
1.41
1.62
1.64
1.62
1.57
1.46
NGL production (Mbbls/d)
102
115
121
120
115
110
NGL equity sales (Mbbls/d)
1
1
—
1
1
2
Non-consolidated (3)
Gathering volumes (Bcf/d)
6.62
6.76
6.92
6.84
6.79
6.62
Plant inlet natural gas volumes
(Bcf/d)
0.87
0.87
0.79
0.73
0.82
0.66
NGL production (Mbbls/d)
60
58
56
51
56
50
NGL equity sales (Mbbls/d)
8
6
6
6
6
4
(1) Excludes certain amounts associated
with revenues and operating costs for reimbursable charges. Also,
Operating and administrative costs increased in 2021, particularly
in third quarter and fourth quarter, due to higher incentive and
equity compensation expense.
(2) Includes volumes associated with
Susquehanna Supply Hub, the Northeast JV, and Utica Supply Hub, all
of which are consolidated.
(3) Includes 100% of the volumes
associated with operated equity-method investments, including the
Laurel Mountain Midstream partnership; and the Bradford Supply Hub
and the Marcellus South Supply Hub within the Appalachia Midstream
Services partnership. Also, all periods have been restated to
include Blue Racer Midstream.
West
(UNAUDITED)
2021 (1)
2022
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
Gathering, processing, transportation,
storage, and fractionation revenues
$
269
$
285
$
302
$
313
$
1,169
$
317
Other fee revenues (2)
6
4
4
7
21
6
Commodity margins
31
26
21
22
100
23
Operating and administrative costs (2)
(109
)
(113
)
(108
)
(112
)
(442
)
(112
)
Other segment income (expenses) - net
—
(1
)
11
(2
)
8
(1
)
Proportional Modified EBITDA of
equity-method investments
25
22
27
31
105
27
Modified EBITDA
222
223
257
259
961
260
Adjustments
—
—
—
—
—
—
Adjusted EBITDA
$
222
$
223
$
257
$
259
$
961
$
260
Statistics for Operated Assets
Gathering and Processing
Consolidated (3)
Gathering volumes (Bcf/d)
3.11
3.21
3.31
3.36
3.25
3.47
Plant inlet natural gas volumes
(Bcf/d)
1.20
1.20
1.29
1.22
1.23
1.13
NGL production (Mbbls/d)
36
39
49
43
41
47
NGL equity sales (Mbbls/d)
13
16
19
15
16
17
Non-consolidated (4)
Gathering volumes (Bcf/d)
0.27
0.30
0.28
0.28
0.29
0.28
Plant inlet natural gas volumes
(Bcf/d)
0.27
0.30
0.28
0.28
0.28
0.27
NGL production (Mbbls/d)
24
32
32
32
29
31
NGL and Crude Oil Transportation volumes
(Mbbls/d) (5)
85
101
119
132
109
118
(1) Recast due to the change in segments
in the first quarter of 2022.
(2) Excludes certain amounts associated
with revenues and operating costs for reimbursable charges. Also,
Operating and administrative costs increased in 2021, particularly
in third quarter and fourth quarter, due to higher incentive and
equity compensation expense.
(3) Excludes volumes associated with
equity-method investments that are not consolidated in our
results.
(4) Includes 100% of the volumes
associated with operated equity-method investments, including Rocky
Mountain Midstream.
(5) Includes 100% of the volumes
associated with operated equity-method investments, including the
Overland Pass Pipeline Company and Rocky Mountain Midstream.
Gas & NGL Marketing
Services
(UNAUDITED)
2021 (1)
2022
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
Commodity margins
$
95
$
13
$
46
$
11
$
165
$
100
Other fee revenues
1
1
—
1
3
1
Net unrealized gain (loss) from derivative
instruments
—
(3
)
(294
)
188
(109
)
(57
)
Operating and administrative costs
(3
)
(3
)
(14
)
(17
)
(37
)
(31
)
Modified EBITDA
93
8
(262
)
183
22
13
Adjustments (2)
—
—
296
(172
)
124
52
Adjusted EBITDA
$
93
$
8
$
34
$
11
$
146
$
65
Statistics
Product Sales Volumes
Natual Gas (Bcf/d)
1.05
0.94
7.98
7.71
7.70
7.96
NGLs (Mbbls/d)
233
216
229
229
227
246
(1) Recast due to the change in segments
in the first quarter of 2022.
(2) 2022 Adjustments for Gas & NGL
Marketing Services includes the impact of volatility on NGL
linefill transactions. Had this adjustment been made in 2021,
Adjusted EBITDA would have been reduced by ($15), ($5), ($15), $1,
and ($34) for the 1st, 2nd, 3rd, and 4th quarters, and full year
period, respectively.
Capital Expenditures and
Investments
(UNAUDITED)
2021
2022
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
Capital expenditures:
Transmission & Gulf of Mexico
$
109
$
209
$
172
$
173
$
663
$
125
Northeast G&P
40
46
41
22
149
40
West
33
76
49
45
203
61
Other
78
94
10
42
224
65
Total (1)
$
260
$
425
$
272
$
282
$
1,239
$
291
Purchases of and contributions to
equity-method investments:
Transmission & Gulf of Mexico
$
3
$
6
$
5
$
12
$
26
$
16
Northeast G&P
11
24
30
24
89
32
Other
—
—
—
—
—
8
Total
$
14
$
30
$
35
$
36
$
115
$
56
Summary:
Transmission & Gulf of Mexico
$
112
$
215
$
177
$
185
$
689
$
141
Northeast G&P
51
70
71
46
238
72
West
33
76
49
45
203
61
Other
78
94
10
42
224
73
Total
$
274
$
455
$
307
$
318
$
1,354
$
347
Capital investments:
Increases to property, plant, and
equipment
$
263
$
430
$
308
$
304
$
1,305
$
260
Purchases of businesses, net of cash
acquired
—
—
126
25
151
—
Purchases of and contributions to
equity-method investments
14
30
35
36
115
56
Purchases of other long-term
investments
—
—
—
6
6
—
Total
$
277
$
460
$
469
$
371
$
1,577
$
316
(1) Increases to property, plant, and
equipment
$
263
$
430
$
308
$
304
$
1,305
$
260
Changes in related accounts payable and
accrued liabilities
(3
)
(5
)
(36
)
(22
)
(66
)
31
Capital expenditures
$
260
$
425
$
272
$
282
$
1,239
$
291
Contributions from noncontrolling
interests
$
2
$
4
$
—
$
3
$
9
$
3
Contributions in aid of construction
$
19
$
17
$
10
$
6
$
52
$
(3
)
Proceeds from disposition of equity-method
investments
$
—
$
1
$
—
$
—
$
1
$
—
Non-GAAP Measures
This news release and accompanying materials may include certain
financial measures – adjusted EBITDA, adjusted income (“earnings”),
adjusted earnings per share, available funds from operations and
dividend coverage ratio – that are non-GAAP financial measures as
defined under the rules of the SEC.
Our segment performance measure, modified EBITDA, is defined as
net income (loss) before income (loss) from discontinued
operations, income tax expense, net interest expense, equity
earnings from equity-method investments, other net investing
income, impairments of equity investments and goodwill,
depreciation and amortization expense, and accretion expense
associated with asset retirement obligations for nonregulated
operations. We also add our proportional ownership share (based on
ownership interest) of modified EBITDA of equity-method
investments.
Adjusted EBITDA further excludes items of income or loss that we
characterize as unrepresentative of our ongoing operations. Such
items are excluded from net income to determine adjusted income and
adjusted earnings per share. Management believes this measure
provides investors meaningful insight into results from ongoing
operations.
Available funds from operations is defined as cash flow from
operations excluding the effect of changes in working capital and
certain other changes in noncurrent assets and liabilities, reduced
by preferred dividends and net distributions to noncontrolling
interests.
This news release is accompanied by a reconciliation of these
non-GAAP financial measures to their nearest GAAP financial
measures. Management uses these financial measures because they are
accepted financial indicators used by investors to compare company
performance. In addition, management believes that these measures
provide investors an enhanced perspective of the operating
performance of assets and the cash that the business is
generating.
Neither adjusted EBITDA, adjusted income, nor available funds
from operations are intended to represent cash flows for the
period, nor are they presented as an alternative to net income or
cash flow from operations. They should not be considered in
isolation or as substitutes for a measure of performance prepared
in accordance with United States generally accepted accounting
principles.
Reconciliation of Income (Loss)
Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted
Income
(UNAUDITED)
2021(1)
2022
(Dollars in millions, except per-share
amounts)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
Income (loss) attributable to The
Williams Companies, Inc. available to common stockholders
$
425
$
304
$
164
$
621
$
1,514
$
379
Income (loss) - diluted earnings (loss)
per common share (2)
$
.35
$
.25
$
.13
$
.51
$
1.24
$
.31
Adjustments:
Transmission &
Gulf of Mexico
Impairment of certain assets
$
—
$
2
$
—
$
—
$
2
$
—
Total Transmission & Gulf of Mexico
adjustments
—
2
—
—
2
—
Gas & NGL
Marketing Services
Amortization of purchase accounting
inventory fair value adjustment
—
—
2
16
18
15
Impact of volatility on NGL linefill
transactions (3)
—
—
—
—
—
(20
)
Net unrealized (gain) loss from derivative
instruments
—
—
294
(188
)
106
57
Total Gas & NGL Marketing Services
adjustments
—
—
296
(172
)
124
52
Other
Expenses associated with Sequent
acquisition and transition
—
—
3
2
5
—
Net unrealized (gain) loss from derivative
instruments
—
4
16
(20
)
—
66
Accrual for loss contingencies
5
5
—
—
10
—
Total Other adjustments
5
9
19
(18
)
15
66
Adjustments included in Modified
EBITDA
5
11
315
(190
)
141
118
Adjustments below
Modified EBITDA
Accelerated depreciation for
decommissioning assets
—
20
13
—
33
—
Amortization of intangible assets from
Sequent acquisition
—
—
21
(3
)
18
42
—
20
34
(3
)
51
42
Total adjustments
5
31
349
(193
)
192
160
Less tax effect for above items
(1
)
(8
)
(87
)
48
(48
)
(40
)
Adjusted income available to common
stockholders
$
429
$
327
$
426
$
476
$
1,658
$
499
Adjusted income - diluted earnings per
common share (2)
$
.35
$
.27
$
.35
$
.39
$
1.36
$
.41
Weighted-average shares - diluted
(thousands)
1,217,211
1,217,476
1,217,979
1,221,454
1,218,215
1,221,279
(1) Recast due to change in segments in
the first quarter of 2022
(2) The sum of earnings per share for the
quarters may not equal the total earnings per share for the year
due to changes in the weighted-average number of common shares
outstanding.
(3) Had this adjustment been made in 2021,
the Gas & NGL Marketing segment would have included adjustments
of ($15), ($5), ($15), $1, and ($34) for the 1st, 2nd, 3rd, and 4th
quarters, and full year period, respectively. This would have
reduced Adjusted income – diluted earnings per common share by
$0.01, $0.01, and $0.02 for the 1st and 3rd quarters, and full year
period, respectively.
Reconciliation of "Net Income (Loss)"
to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA”
(UNAUDITED)
2021(1)
2022
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
Net income (loss)
$
435
$
322
$
173
$
632
$
1,562
$
392
Provision (benefit) for income taxes
141
119
53
198
511
118
Interest expense
294
298
292
295
1,179
286
Equity (earnings) losses
(131
)
(135
)
(157
)
(185
)
(608
)
(136
)
Other investing (income) loss - net
(2
)
(2
)
(2
)
(1
)
(7
)
(1
)
Proportional Modified EBITDA of
equity-method investments
225
230
247
268
970
225
Depreciation and amortization expenses
438
463
487
454
1,842
498
Accretion expense associated with asset
retirement obligations for nonregulated operations
10
11
12
12
45
11
Modified EBITDA
$
1,410
$
1,306
$
1,105
$
1,673
$
5,494
$
1,393
Transmission & Gulf of Mexico
$
660
$
646
$
630
$
685
$
2,621
$
697
Northeast G&P
402
409
442
459
1,712
418
West
222
223
257
259
961
260
Gas & NGL Marketing Services
93
8
(262
)
183
22
13
Other
33
20
38
87
178
5
Total Modified EBITDA
$
1,410
$
1,306
$
1,105
$
1,673
$
5,494
$
1,393
Adjustments (2):
Transmission & Gulf of Mexico
$
—
$
2
$
—
$
—
$
2
$
—
Gas & NGL Marketing Services(3)
—
—
296
(172
)
124
52
Other
5
9
19
(18
)
15
66
Total Adjustments
$
5
$
11
$
315
$
(190
)
$
141
$
118
Adjusted EBITDA:
Transmission & Gulf of Mexico
$
660
$
648
$
630
$
685
$
2,623
$
697
Northeast G&P
402
409
442
459
1,712
418
West
222
223
257
259
961
260
Gas & NGL Marketing Services
93
8
34
11
146
65
Other
38
29
57
69
193
71
Total Adjusted EBITDA
$
1,415
$
1,317
$
1,420
$
1,483
$
5,635
$
1,511
(1) Recast due to change in segments in
the first quarter of 2022.
(2) Adjustments by segment are detailed in
the "Reconciliation of Income (Loss) Attributable to The Williams
Companies, Inc. to Non-GAAP Adjusted Income," which is also
included in these materials.
(3) 2022 Adjustments for Gas & NGL
Marketing Services includes the impact of volatility on NGL
linefill transactions. Had this adjustment been made in 2021,
Adjusted EBITDA would have been reduced by ($15), ($5), ($15), $1,
and ($34) for the 1st, 2nd, 3rd, and 4th quarters, and full year
period, respectively.
Reconciliation of Cash Flow from
Operating Activities to Available Funds from Operations
(AFFO)
(UNAUDITED)
2021
2022
(Dollars in millions, except coverage
ratios)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
The Williams Companies, Inc.
Reconciliation of GAAP "Net cash provided
(used) by operating activities" to Non-GAAP "Available funds from
operations"
Net cash provided (used) by operating
activities
$
915
$
1,057
$
834
$
1,139
$
3,945
$
1,082
Exclude: Cash (provided) used by changes
in:
Accounts receivable
59
(9
)
488
7
545
3
Inventories
8
50
54
12
124
(178
)
Other current assets and deferred
charges
6
50
11
(4
)
63
65
Accounts payable
(38
)
(56
)
(476
)
(73
)
(643
)
138
Accrued liabilities
116
(130
)
(53
)
9
(58
)
149
Changes in current and noncurrent
derivative assets and liabilities
6
25
236
10
277
(101
)
Other, including changes in noncurrent
assets and liabilities
10
(31
)
27
(5
)
1
67
Preferred dividends paid
(1
)
—
(1
)
(1
)
(3
)
(1
)
Dividends and distributions paid to
noncontrolling interests
(54
)
(41
)
(40
)
(52
)
(187
)
(37
)
Contributions from noncontrolling
interests
2
4
—
3
9
3
Available funds from operations
$
1,029
$
919
$
1,080
$
1,045
$
4,073
$
1,190
Common dividends paid
$
498
$
498
$
498
$
498
$
1,992
$
518
Coverage ratio:
Available funds from operations divided by
Common dividends paid
2.07
1.85
2.17
2.10
2.04
2.30
Reconciliation of Net Income (Loss) to
Modified EBITDA, Non-GAAP Adjusted EBITDA and Cash Flow from
Operating Activities to Non-GAAP Available Funds from Operations
(AFFO)
2022 Guidance
(Dollars in millions, except per-share
amounts and coverage ratio)
Low
Mid
High
Net income (loss)
$
1,666
$
1,766
$
1,866
Provision (benefit) for income taxes
535
585
635
Interest expense
1,145
Equity (earnings) losses
(570
)
Proportional Modified EBITDA of
equity-method investments
915
Depreciation and amortization expenses and
accretion for asset retirement obligations associated with
nonregulated operations
2,100
Other
(9
)
Modified EBITDA
$
5,782
$
5,932
$
6,082
EBITDA Adjustments
118
Adjusted EBITDA
$
5,900
$
6,050
$
6,200
Net income (loss)
$
1,666
$
1,766
$
1,866
Less: Net income (loss) attributable to
noncontrolling interests & preferred dividends
80
Net income (loss) attributable to The
Williams Companies, Inc. available to common stockholders
$
1,586
$
1,686
$
1,786
Adjustments:
Adjustments included in Modified EBITDA
(1)
118
Adjustments below Modified EBITDA (2)
167
Allocation of adjustments to
noncontrolling interests
—
Total adjustments
285
Less tax effect for above items
(71
)
Adjusted income available to common
stockholders
$
1,800
$
1,900
$
2,000
Adjusted diluted earnings per common
share
$
1.47
$
1.56
$
1.64
Weighted-average shares - diluted
(millions)
1,221
Available Funds
from Operations (AFFO):
Net cash provided by operating activities
(net of changes in working capital, changes in current and
noncurrent derivative assets and liabilities, and changes in other,
including changes in noncurrent assets and liabilities)
$
4,600
$
4,750
$
4,900
Preferred dividends paid
(3
)
Dividends and distributions paid to
noncontrolling interests
(190
)
Contributions from noncontrolling
interests
43
Available funds from operations
(AFFO)
$
4,450
$
4,600
$
4,750
AFFO per common share
$
3.64
$
3.77
$
3.89
Common dividends paid
$
2,075
Coverage Ratio (AFFO/Common dividends
paid)
2.14x
2.22x
2.29x
(1) Includes 1Q adjustments of $118
million included in Modified EBITDA.
(2) Includes amortization of Sequent
intangible asset of $167 million.
Forward-Looking Statements
The reports, filings, and other public announcements of The
Williams Companies, Inc. (Williams) may contain or incorporate by
reference statements that do not directly or exclusively relate to
historical facts. Such statements are “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933, as
amended (Securities Act), and Section 21E of the Securities
Exchange Act of 1934, as amended (Exchange Act). These
forward-looking statements relate to anticipated financial
performance, management’s plans and objectives for future
operations, business prospects, outcome of regulatory proceedings,
market conditions, and other matters. We make these forward-looking
statements in reliance on the safe harbor protections provided
under the Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical facts,
included in this report that address activities, events, or
developments that we expect, believe, or anticipate will exist or
may occur in the future, are forward-looking statements.
Forward-looking statements can be identified by various forms of
words such as “anticipates,” “believes,” “seeks,” “could,” “may,”
“should,” “continues,” “estimates,” “expects,” “forecasts,”
“intends,” “might,” “goals,” “objectives,” “targets,” “planned,”
“potential,” “projects,” “scheduled,” “will,” “assumes,”
“guidance,” “outlook,” “in-service date,” or other similar
expressions. These forward-looking statements are based on
management’s beliefs and assumptions and on information currently
available to management and include, among others, statements
regarding:
- Levels of dividends to Williams stockholders;
- Future credit ratings of Williams and its affiliates;
- Amounts and nature of future capital expenditures;
- Expansion and growth of our business and operations;
- Expected in-service dates for capital projects;
- Financial condition and liquidity;
- Business strategy;
- Cash flow from operations or results of operations;
- Seasonality of certain business components;
- Natural gas, natural gas liquids and crude oil prices, supply,
and demand;
- Demand for our services;
- The impact of the coronavirus (COVID-19) pandemic.
Forward-looking statements are based on numerous assumptions,
uncertainties, and risks that could cause future events or results
to be materially different from those stated or implied in this
report. Many of the factors that will determine these results are
beyond our ability to control or predict. Specific factors that
could cause actual results to differ from results contemplated by
the forward-looking statements include, among others, the
following:
- Availability of supplies, market demand, and volatility of
prices;
- Development and rate of adoption of alternative energy
sources;
- The impact of existing and future laws and regulations, the
regulatory environment, environmental matters, and litigation, as
well as our ability to obtain necessary permits and approvals, and
achieve favorable rate proceeding outcomes;
- Our exposure to the credit risk of our customers and
counterparties;
- Our ability to acquire new businesses and assets and
successfully integrate those operations and assets into existing
businesses as well as successfully expand our facilities, and to
consummate asset sales on acceptable terms;
- Whether we are able to successfully identify, evaluate, and
timely execute our capital projects and investment
opportunities;
- The strength and financial resources of our competitors and the
effects of competition;
- The amount of cash distributions from and capital requirements
of our investments and joint ventures in which we participate;
- Whether we will be able to effectively execute our financing
plan;
- Increasing scrutiny and changing expectations from stakeholders
with respect to our environmental, social, and governance
practices;
- The physical and financial risks associated with climate
change;
- The impacts of operational and developmental hazards and
unforeseen interruptions;
- The risks resulting from outbreaks or other public health
crises, including COVID-19;
- Risks associated with weather and natural phenomena, including
climate conditions and physical damage to our facilities;
- Acts of terrorism, cybersecurity incidents, and related
disruptions;
- Our costs and funding obligations for defined benefit pension
plans and other postretirement benefit plans;
- Changes in maintenance and construction costs, as well as our
ability to obtain sufficient construction-related inputs, including
skilled labor;
- Inflation, interest rates, and general economic conditions
(including future disruptions and volatility in the global credit
markets and the impact of these events on customers and
suppliers);
- Risks related to financing, including restrictions stemming
from debt agreements, future changes in credit ratings as
determined by nationally recognized credit rating agencies, and the
availability and cost of capital;
- The ability of the members of the Organization of Petroleum
Exporting Countries and other oil exporting nations to agree to and
maintain oil price and production controls and the impact on
domestic production;
- Changes in the current geopolitical situation, including the
Russian invasion of Ukraine;
- Changes in U.S. governmental administration and policies;
- Whether we are able to pay current and expected levels of
dividends;
- Additional risks described in our filings with the Securities
and Exchange Commission (SEC).
Given the uncertainties and risk factors that could cause our
actual results to differ materially from those contained in any
forward-looking statement, we caution investors not to unduly rely
on our forward-looking statements. We disclaim any obligations to
and do not intend to update the above list or announce publicly the
result of any revisions to any of the forward-looking statements to
reflect future events or developments.
In addition to causing our actual results to differ, the factors
listed above and referred to below may cause our intentions to
change from those statements of intention set forth in this report.
Such changes in our intentions may also cause our results to
differ. We may change our intentions, at any time and without
notice, based upon changes in such factors, our assumptions, or
otherwise.
Because forward-looking statements involve risks and
uncertainties, we caution that there are important factors, in
addition to those listed above, that may cause actual results to
differ materially from those contained in the forward-looking
statements. For a detailed discussion of those factors, see (a)
Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for
the year ended December 31, 2021, as filed with the SEC on February
28, 2022, and (b) Part II, Item 1A. Risk Factors in our Quarterly
Report on Form 10-Q for the period ended March 31, 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220502005621/en/
MEDIA CONTACT: media@williams.com (800) 945-8723
INVESTOR CONTACT: Danilo Juvane (918) 573-5075
Grace Scott (918) 573-1092
Williams Companies (NYSE:WMB)
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Williams Companies (NYSE:WMB)
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From Jul 2023 to Jul 2024